Conversion Fee

A conversion fee (sometimes called a buyout) is the amount an employer pays a staffing agency to move a temp-to-hire worker onto the employer's permanent payroll.

Because the agency invested in recruiting the worker and expected to earn margin over a temporary period, converting the worker early shortens that period — so a conversion fee compensates the agency. The fee often decreases the longer the worker has been on assignment, and may disappear after a set threshold.

When negotiating a temp-to-hire arrangement, it's worth clarifying the conversion fee up front: how much it is, and how it changes over the course of the assignment.

Related terms

Related staffing services